JOURNALIST: Penny Wong has been kind enough to give us her time on Drive, before jumping on a plane, and heading back east presumably. Minister, thank you so much for joining us.
WONG: Good to be with you.
JOURNALIST: The heads of various Commonwealth countries heading our way, and many of them were much more affected by global financial troubles than Australia was. Do you think theres anything this group leaders could do to improve the worldwide financial outlook?
WONG: We live in an interconnected world, and in that sort of world, the more dialogue, the more partnerships that you have, the more understanding of the global economy, the better. People working together is a good thing. And as the Prime Minister said today, we in the Commonwealth should continue to press for reform in Europe, thats obviously the locus of the most deep uncertainty that we see in the global economy, and thats having consequences and ramifications for all nations.
JOURNALIST: Theres probably not many occasions, when you can bring together a group of world leaders like this, and Australia can lead the way in an area. But when it comes to getting through the financial crisis, there may be things that we can teach. Is it a forum like that? Are you able to pass on wisdom? Or is that a bit cheeky?
WONG: Its a forum for dialogue, its a forum for partnership, and its a forum which encompasses about a third of the worlds population. Countries with very different economic systems in terms of different stages of economic development. Today I participated in a forum on small and medium enterprises. There were speakers from Nigeria and Malaysia, as well as me, and it was very interesting to look at the different ways in which countries within the Commonwealth, at different stages of development, have looked to support small and medium businesses.
JOURNALIST: Lets talk about WA for a moment. There is a boom going on here. I mean, our Premier, Colin Barnett, doesnt like to use that expression, is it one that you fancy?
WONG: What were seeing is a very significant wave of investment, increasing mining investment across the country, projected to go to $83 billion in the financial year 11-12, up from $35 billion in financial year 09-10.
JOURNALIST: So is that boom time, in your opinion then?
WONG: What were seeing very high prices for some of our commodities, some of our resources, were seeing a lot of investment. And the key economic challenge is, how do we manage that, for the best interests of Australians now, but also in the future.
And thats what the mining tax is about. Its about saying, look, we know that these sorts of prices wont last forever. Lets ensure that Australians get a better revenue stream from that, and lets invest it wisely. Lets invest it in lower taxes for companies, with a head start for small business, invest it in more superannuation for working Australians, and invest it in the infrastructure we need.
JOURNALIST: Youre a brave Minister bringing up the expression resources tax like that. And its probably true that you are just about to jump on a plane. Have you mentioned those words to anyone in Western Australia since youve been here?
WONG: Im very happy to have that discussion, because its not just about state versus state in this discussion there is a patchwork economy within states as well. And I think it is a very sensible thing to say, lets use some of the benefits of the high prices were getting for the future.
It seems bizarre, doesnt it, that youve got a Coalition that says we want lower taxes for miners, and higher taxes for small business. What were saying in the Government is, were getting high prices now, we will only get them for a period of time I hope it goes for a very long time but we know these things dont last forever. Lets use the proceeds of this investment boom wisely, lets invest in lower taxes for small business and manufacturers and, as I said, superannuation for all working Australians and also, the infrastructure that we know we need.
JOURNALIST: There is an argument in Western Australia that were seeing all of these amazing projects happening, but the wealth is not filtering through the broader community. What can make that happen?
WONG: And I can understand that, I get that in South Australia, where Im from, as well. People say well, Im not seeing much of this. And part of the job of Government at this time of change is to try and work out how you spread the benefits of the high prices as best you can. How do you try and make sure that more Australians get the benefit of what you call the boom, and the mining tax is part of that, as is the investment in skills, and in infrastructure. These are all things which are about trying to get the most out of the resource prices were getting.
JOURNALIST: There is a school of thought, I guess, that China has burnt a little bit too brightly in the last couple of years. They also had some schemes set up by the government to get infrastructure projects underway building new factories and apartment blocks for a population that actually didnt exist. A lot of those places are empty. Now theyre saying the demand for our produce is likely to drop off a little bit in 2012. Prices are most likely to come down. Weve seen iron ore prices at, I think its around $160 a tonne. Theres a thought that they could come down to $120 or something. Zinc, nickel prices coming off as well. And that could all happen in the next four months or so.
WONG: Youre going to see movement in prices on world markets, you always have. Im certainly not going to predict what the copper or the iron ore price will be. But what I would say is this: weve got to think about this, not just in terms of the next four months. Weve got to think about this in terms of the next decades, because thats the perspective that will bring the most prosperity to Australians and their families.
And if you think about it from the perspective of decades, what we know is that over time were going to see China grow, were going to continue to see India grow. People may argue about how quickly it will be, and whether there will be ups and downs, but we are seeing a very significant transition.
Not just the urbanisation of China, but also the increasing affluence, as more and more Chinese and Indians millions of people, enter the middle classes. And theyre going to have the demand for goods and services that people who have a bit more disposable income want. Now, that means that we do have an enormous opportunity as this nation, and we have to use the opportunity wisely.
JOURNALIST: So what about your Departments thinking on the Australian dollar, where its likely to go on growth rates for Australia over the next nine months?
WONG: Theres obviously more volatility in the world economy and we live in the world economy, the global economy, so were not unaffected. Weve seen a lot more volatility, particularly on share markets and weve seen a lot of movement in the dollar. And those things are obviously causing some difficulty for a lot of businesses here in Australia.
I think its important to emphasise that there is a lot of positive data if you look at the Australian economy. We have very low levels of public debt, the peak net debt that the Australian Government has is less than one-tenth of what most major advanced economies. So one-tenth of the debt that youre looking at in the major advanced economies elsewhere. Weve got low unemployment, particularly by international standards. Weve got a five in front of our unemployment rate. Weve got the US with a nine, and Europe at ten. So we do face a lot of this volatility, I think, from a position of strength.
JOURNALIST: I know it is volatile, so the markets are behaving a little erratically I guess, but we saw the Australian dollar at 110 US cents. There was speculation then that it would go to 130 in some quarters. It of course drifted back below parity. And now its at a six week high, something like 104 US cents. Do you see it potentially where are you pitching it?
WONG: Governments shouldnt really predict where prices like the dollar go, because obviously thats an issue that the markets will end up resolving. And thats driven by a whole range of factors. Were of the perspective of how strong the Australian economy is as well as where global currency markets are.
JOURNALIST: But is there a range that you work with?
WONG: Certainly we have assumptions about the dollar that are included in our budget forecasts. And theyre updated, and theyre broadly in line with the sorts of forecasts you see in the private sector. I think its true to say weve seen a lot of movement in the dollar, and thats one of the challenges of the change in our economy that I talked about earlier. Thats why you have to have policies in place which are about the future.
JOURNALIST: Youre listening to Drive on 720 ABC Perth and the Minister for Finance and Deregulation Penny Wong is having a chat with us this afternoon. Minister, a week or so ago you raised an issue about increasing the number of women sitting on boards as directors and you say that youll appoint more to Government boards. That brings up an obvious criticism, and I saw this in letters to the editor and we received it when we discussed it on the Drive program through our listeners on SMS as well. The criticism is that you should be picking the person not based on gender but on their abilities. Who is the best person to sit on this board? How do you respond to that criticism?
WONG: I agree. But if you think that merit has been the only basis on which people get assessed, how do you explain that in our major companies, I think its our top 200, only 13% of board directors are women? I mean you either have two propositions out of that; were not good enough or something else is preventing qualified women from getting there.
And thats something else that may be cultural, it may be organisational, it may be that we havent had enough women coming through. But I agree with you, merit should be the criteria. The problem is at the moment were not necessarily getting consideration of women who are appropriately qualified. So the point of having a target is not to say you put people on who arent qualified. Its to say well lets expand our horizons a little bit, and see where are women who are appropriately qualified for these jobs. And I think in 2011 were probably at the stage where we can do that.
JOURNALIST: Minister I wish you werent the go-to woman for this question, Ill be honest, and I could share it around. But Labor is set to debate national laws on same-sex marriage, and it was a topic that came up again on Q&A last night. Can you see any actual change to laws coming out of the debate?
WONG: The first point Id make is change is always something that occurs in stages, isnt it? And I can remember these issues being debated in the nineties inside the Labor Party, the issue of discrimination on the basis of sexual orientation.
It took a Labor Government to remove discrimination of same-sex couples from Commonwealth laws, apart from marriage. So for the purposes of things like Medicare, or through the tax system. It took a Labor Government to ensure that a same-sex couple had the same obligations and the same rights as a heterosexual couple.
This is an issue that people have different views on, and I understand that. And it will be an issue that well debate at national conference. What happens then after that is a matter for the Parliament, I wouldnt want to make any guesses about that. But I would say my view is that over time you always see change on these sorts of social issues. And if you take a longer term perspective, remember where we used to be in terms of women more generally. Remember this country once had a White Australia policy. That was when my parents got married. So there is always change.
JOURNALIST: And bringing this back now to CHOGM if I can Minister, in 41 of the 54 Commonwealth countries, homosexuality is still illegal. How do you reflect on that? How do you reflect on the fact that homosexuality is illegal in so many countries that are in fact so closely associated to us in Australia?
WONG: Obviously countries put in laws in their own democracies that they see fit. But I think the values of Australians and the values of the Australian Government are clear. We do believe human rights are important. And I think this country has quite some time ago dealt with the issues of individual rights across a whole range of perspectives and qualities, and one of them was peoples sexual orientations.
Its been a long time that weve had laws in this country that say that we dont discriminate on that basis. And we dont, you know, we dont target people, we dont criminalise these activities. So theyre the values that we bring to this discussion.
JOURNALIST: Minister for Finance and Deregulation Penny Wong has been my guest on Drive this afternoon. Youre listening to 720 ABC Perth. Minister, thank you so much for having a chat.
WONG: Its been really good to speak with you.
ENDS